A beer tax for downtown Madison (October 2009)

[This originally appeared in Muckrakers on October 15th, 2009]

This post isn’t going to win me any friends, but what if we added a localized alcohol sales tax to downtown bars?

A few years back, Madison added a $100,000 fund for the “Downtown Safety Initiative”. It funds police overtime to add extra patrols on busy nights in downtown Madison. The DSI isn’t used every night, or even every weekend night – it often depends on what else is going on, like football games and even the weather. Every year, the DSI runs out of money before the end of year.

The DSI has always been a target or acomplaint from alders from outside the downtown core. It is in the budget again this year – with a twist. Instead of getting $100,000, this year it’s funded at $80,000. The remaining $20,000 will come from “donors”. From a Mayor who prides himself on enhancing public safety, that’s sort of like replacing some of our full time fire fighters with volunteers.

I’m glad the DSI is being funded, and I’d like to see the police have extra resources, so long asthey’re not being wasted on checking for 20 year olds with fake IDs. In fact, I’d like to see if funded sufficiently to make it through the entire year. However, it’s a tough sell to the rest of the city to increase the funding, especially in this budget environment.

The Ed Board today decided that it could handle the principle of taxing booze to raise some funds for the government. It’s not quite apples-to-oranges, but what if we applied the same logic and added a sales tax to downtown alcohol sales? We could use that new revenue to fund the DSI. It wouldn’t be a huge tax, mind you, just maybe something that would raise a tolerable beer from $3 to $3.15 or $3.25. The DSI doesn’t cover the entire city, so this wouldn’t hit every bar in the city. A logical set of bars to add the tax would be the bars in the Alcohol License Density Plan area.

It’s a small enough tax that no one is seriously going to say “fuck it, I’m going out to the Hilldale Great Dane because it’s cheaper”. It’s not meant to reduce alcohol consumption. Even a very small tax could raise some serious funds – the bars in the ALDP do millions of dollars a year in alcohol sales. It applies to everyone who drinks downtown, including those who come in from the outskirts of town, but only those who actually use the downtown bars. That’s something that all-but-officially-running-for-Mayor Alder Schumacher could support.

It’s also more fair than asking for voluntary contributions from downtown businesses. The cost of the “donation” is going to get passed on to the clients anyway, and so what’s the incentive for all bars to participate? Brothers would be better off if it didn’t donate, and instead let Wando’s and the KK pony up.

There’s certainly precedence – many of the bars in the downtown area are already part of the Business Improvement District, which means they all have no choice but to pay extra taxes to support special programs in the downtown area.

I have no idea if this plan is even legal, and if state law permits the city to tax like this. I assume that if nothing else, the city can put conditions on liquor licenses to effectively create the tax.

It’s a better plan than passing the hat to fund a critical safety tool.

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